The role of internal auditing in risk management: evidence from banks in Jordan
Journal of Economic and Administrative Sciences
ISSN: 1026-4116
Article publication date: 18 May 2015
Abstract
Purpose
The purpose of this paper is to explore the current practices of internal auditors in banks in Jordan regarding risk management, especially the risks they are most involved in dealing with, the nature of their responses in the presence of these risks, and appropriateness (according to the Institute of Internal Auditors (IIA), 2009a) of these responses.
Design/methodology/approach
A questionnaire surveyed views of internal auditors about their roles in risk management. It asked about 20 different types of risks, and, for each individual risk, how internal auditors would respond in its presence.
Findings
The role of internal auditors in risk management in banks in Jordan was found to be limited. The risks that internal auditors were most involved in managing were those related to compliance, while the risks least dealt with by internal auditors included those related to the Jordanian economy and culture. Also, most of the respondents reported that they did undertake some inappropriate roles in dealing with the risks.
Practical implications
The findings suggest the possibility that internal auditors are not aware of the importance of several types of risks and of the appropriate roles for internal auditors in risk management. Therefore, increasing awareness of these issues is very important.
Originality/value
The research topic is relatively new and very under-researched in the Jordanian environment. This study is therefore likely to significantly contribute to the knowledge about how internal auditing operates in a developing country context that differs significantly from the contexts where professional internal auditing standards were issued.
Keywords
Acknowledgements
The researchers thank participants in the 16th International Business Research Conference (Dubai, UAE, 12-13/4/2012) and the fourth Scientific Conference of the Faculty of Economics and Administrative Sciences - Applied Science Private University (Amman, Jordan, 30/4-1/5, 2012) for the comments on earlier versions of the paper.
Citation
Abdullatif, M. and Kawuq, S. (2015), "The role of internal auditing in risk management: evidence from banks in Jordan", Journal of Economic and Administrative Sciences, Vol. 31 No. 1, pp. 30-50. https://doi.org/10.1108/JEAS-08-2013-0025
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited